Lebanon reportedly intends to forcibly convert foreign currency holdings into Lebanese Pound (LBP), a fact that once again speaks in favor of Bitcoin (BTC).
Earlier this week, Reuters said it had learned of a government plan designed to tackle the current financial crisis. This plan, the news agency wrote, “provides for a 93% devaluation of the Lebanese pound and a conversion of the bulk of hard currency deposits in the banking system into local currency.”
Investors would potentially face huge losses if the plan were implemented. Reuters goes on to state that “of the $104 billion in hard currency deposits”, the plan’s authors “plan to return only $25 billion to dollar savers, the rest will be converted into LBP at several exchange rates, which which would make 75% of certain deposits disappear”.
And while the government allegedly plans to reimburse “all depositors”, it will do so over “a period of 15 years”.
Alex Gladsteindirector of strategy at the Human Rights Foundationat lamented the fact that the world just watches “bureaucrats loot the currency of a once proud nation”.
From the side of the Bitcoin community, the message was clear: “Bitcoin solves this problem.”
Nic Carterpartner of Castle Island Venturesat valued that what is happening in Lebanon is “a story as old as the world” and that depositors could “suffer a massive discount”. However, he said it was “only a matter of time before crypto-dollarization becomes the default and robs these central banks of their primary weapon.”
The Podcaster Neil Jacobs shared a video featuring comments from Mexican billionaire and Bitcoin bull Ricardo Salinas Pliego. The latter said:
“Everything we have in fiat is 100% seizable by the government. People don’t realize that […]. But it is a fact. “
Elsewhere, some commentators have added that the best way to prevent states from getting their hands on their bank accounts is to convert their funds into cryptocurrency which they keep in a hardware wallet.
However, Lebanese depositors are not the only ones now living in fear of what the government will do with their foreign currency funds.
Nic Carter has underline the relevance of a Wall Street Journal (WSJ) article dated January 12, which explains that Turkish citizens are making large investments in Bitcoin (BTC) and Tether (USDT) to escape the “fall” of the read.
The WSJ report explained that some Turkish citizens were wary of the government “forcing banks” to convert dollar deposits into lira. This was pushing some investors to exchange bank-held dollars and cash dollars for stablecoins “according to several Turkish savers.” The WSJ adds that according to chain analysis “more than half of transactions against the lira in December involved Tether.”
Cryptocurrency and stablecoin activity also spiked in Argentina, which has been battling hyperinflation for several months – leading the government to curb USD buying.
Others have argued that the widespread adoption of USDT could lead to the development of “hyperdollarized” economies.
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